AutoBeta(AutoBeta.net)04/16 Report--

Faraday Future (hereinafter referred to as "FF") issued a statement on its official Weibo on April 16, responding to recent allegations of "early fake sales" about FF 91 2.0.

FF said it firmly reiterated that there was no "early false sale" of FF 91 2.0 and pointed out that all FF 91 2.0 vehicle deliveries were legal. FF stressed that the company has established a sound internal control mechanism to ensure that the necessary full payment or down payment has been received before the public announcement, to complete the approval of Lease (rental and sales) vehicles, and the registration process of the Traffic Control Bureau. At the same time, FF solemnly declares that there is absolutely no false behavior in the company's sales activities. FF is committed to legal and ethical standards, encourages employees to report any suspicious behavior, and never retaliates against well-intentioned whistleblowers.

Let's review the cause of the incident: two FF employees, Jose Guerrero and Victoria Xie, reported that some of the small number of cars that FF has delivered so far are counterfeit. Among them, Raino, as FF sales and after-sales director, submitted an internal report letter to the general counsel of FF, claiming that FF lied about the sales of the first four FF91 vehicles, FF in the sales process, three of the four FF91 announced delivery before the completion of the sales process, and only one received full payment 60 days after delivery, in order to increase the company's share price by announcing sales. In addition, the two employees pointed out that Jia Yueting, founder of FF, had "weaponized" the company's human resources department to retaliate against anyone who exposed the false sales. To this end, the two internal whistleblowers filed two new lawsuits against FF, Jia Yueting and Yang Nan, the company's human resources director, in Los Angeles Superior Court, accusing them of wrongful dismissal, breach of contract and mental injury.

Jia Yueting and FF responded to the news on April 10th. Jia Yueting said: "the statement about the lawsuit filed by the recently dismissed employee: I think there are a lot of false statements and slander in the complaint for the purpose of retaliation and racketeering. I will countersue these two people!" "FF attaches great importance to the two lawsuits filed by former employees," FF said on its official Weibo blog. "the company believes that we have good grounds to respond to the allegations in the complaint based on the facts. at the same time, the company will take all necessary measures to protect the company's reputation and all employees from all charges and violations, including personality attacks."

It is worth mentioning that as one of the earliest new car-building forces, FF has been building cars for about 10 years, but so far it has only delivered 11 cars, of which the fourth is owned by Jia Yueting himself, which is not much different from "PPT car-building" in essence.

FF is in a cash-strapped crisis, and in late March, FF was sued for owed $91787.26 (664000 yuan) in rent from its headquarters in Los Angeles. The latest earnings figures show that FF posted a net loss of $78 million (569 million yuan) in the third quarter of 2023, consuming an average of about $875000 a day. At the end of September 2023, FF had only about $8.5 million in cash on its books, of which $1.85 million was restricted cash. Since FF started building cars, it has invested about $3 billion (21.9 billion yuan), but has produced only 11 cars. Admittedly, FF is now heavily in debt.

With the development of the era of new energy vehicles, countless new forces have fallen before this, and this year is defined as a more competitive year in the market. From now on, it is almost impossible for FF to rely on the FF 91 to succeed. First, FF91 has yet to achieve large-scale mass production, making cars for nearly a decade and generating revenue for the first time in the third quarter of 2023, when FF delivered seven new cars to users in the third quarter, realizing car sales of $551000 (4.02 million yuan) for the first time, but a net loss of $78 million over the same period. In addition, FF invested a total of about $3 billion (21.9 billion yuan) to build the FF 91 2.0 FuturistAlliance model, and it is clear that the revenue of $551000 is "negligible" compared with the huge investment. Second, even if FF91 has been mass produced, it is difficult to open the market. From the positioning and price of FF91, the price of FF91 positioning luxury car, as high as 2 million yuan, is not suitable for the mass consumer market, and it is difficult for consumers to pay for it.

As of April 15, FF's latest shares closed down 10% at $0.072, with a market capitalization of just $3.0724 million. Its initial stock price, which peaked at $13.98, has fallen 98%.

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